Illegal construction is endemic in Italy, encouraged by a system of retrospective planning permission. People put an extra storey on their house, or build in areas not designated for residential use, and then hope to be able to pay a fine called a "condono" to legalise the situation. These pardons can be applied for during building amnesties and are a useful way for governments to receive injections of cash. They were extensively used by the former prime minister Silvio Berlusconi's administration.

The flaws in such a system were brought sharply into focus recently after the deaths of a father and his three daughters aged 12, 16 and 18 on the tourist island of Ischia, near Naples. Luigi Buono and his children were killed when their house collapsed after being engulfed by mud during torrential rain. The disaster happened as the family was sleeping and only Mr Buono's wife and a three-year-old niece survived.

It emerged that the house should never have been built in its position on a steep hillside. It was clearly marked on the map as being beside a zone classified as high risk to the population because of landslides. Mr Buono had constructed his property, and lived in it, in the expectation of receiving a "condono". The disaster has brought back memories of similar unauthorised building work that was blamed for the deaths of more than 140 people in a mudslide in 1998 in the town of Sarno, south of Naples.

The local authorities stand accused of having a laissez-faire attitude towards the illegal properties that have sprung up on Ischia and of not warning Mr Buono and his family and others who live nearby of the specific dangers they faced. The disaster has also reignited controversy about deforestation and inadequate flood prevention plans on an island that is volcanic in origin and has a history of natural disasters. The environmental pressure group Legambiente estimates that a fifth of properties on island remain at risk from landslide.

"Ischia has one of the worst records in the region of Campania for illegal building," said Michele Buonomo, a spokesman for Legambiente. "An explosion in unlicensed construction has been allowed to go unchecked for decades."

According to the group, there were nearly 9,000 requests for pardons during the last building amnesty in 2004 on an island whose resident population is 69,000.

Ischia's mayor, Giuseppe Brandi, has been stung by the attack. "Certainly the island has grown quickly and without proper planning, but these houses are there out of necessity, not for any commercial reason." He said local people have been driven out of the desirable coastal areas and forced to move inland, because tourists are snapping up properties as second homes. The price of property in the island's main resort of Forio is now £3,000 a square metre, far beyond the modest resources of many islanders. Most of the "condonos" that had been granted, he said, were for small improvements to properties such as building an extra room or adding a balcony. He said the amnesty system encouraged "necessary unlawfulness".

Mr Brandi, who has been mayor for four years, obviously cannot be held responsible for decades of illegal building. He said zoning inspectors now regularly carry out inspections of properties and close down illegal sites. "What else can I do - other than go around with a pistol, like the Far West?" he said.

Legambiente and the Greens are stepping up calls for greater controls on Ischia and in the south of Italy, where unlicensed construction is most common. Both groups say building amnesties are inherently dangerous and demeaning to many householders. People should not have to colonise inhospitable areas in the hope that, once they are there, they will be allowed to stay. They have also criticised an amendment to the building amnesty law, pushed through by Mr Berlusconi two years ago, that allows people to legalise buildings on protected habitats for an extra fee.

Many on the Italian left also support a clampdown, and Italy's new prime minister, Romano Prodi, is being reminded of his pre-election promise to overcome the climate of tolerance that has allowed the practice to flourish.

Since the tragedy some 250 people living near the Buono property have been evacuated. Some have been allowed to return to their homes. Others will never go back because their properties are now deemed unsafe.